One Up On Wall Street: How To Use What You Already Know To Make Money In

by Peter Lynch

During every question-and-answer period after I give a speech, somebody stands up and asks me if we’re in a good market or a bad market.

Obviously you don’t have to be able to predict the stock market to make money in stocks, or else I wouldn’t have made any money.

I wasn’t the only one who failed to issue a warning. In fact, if ignorance loves company, then I was very comfortably surrounded by a large and impressive mob of famous seers, prognosticators, and other experts who failed to see it, too.

if all the people who claimed to have predicted it beforehand had sold out their shares, then the market would have dropped the 1,000 points much earlier due to these great crowds of informed sellers.

Since the stock market is in some way related to the general economy, one way that people try to outguess the market is to predict inflation and recessions, booms and busts, and the direction of interest rates.

There are 60,000 economists in the U.S., many of them employed full-time trying to forecast recessions and interest rates, and if they could do it successfully twice in a row, they’d all be millionaires by now.

Someday there will be another recession, which will be very bad for the stock market, as opposed to the inflation that is also very bad for the stock market. Maybe there will already have been a recession between now and the time this is published.

If professional economists can’t predict economies and professional forecasters can’t predict markets, then what chance does the amateur investor have? You know the answer already,